What is a Fuel Tax Bond?A fuel tax bond guarantees that all fuel sellers operating within a state will pay the state government all required taxes, penalties, and any interest owed. A fuel tax bond is required to be posted for all fuel owners as long as their license is active. If a fuel seller does not comply with regulations, the fuel tax bond also serves as a protection for the public and the state. As the bond’s obligees, they have the right to file a claim against the bond, and be compensated by the surety backing the bond. Most states have one or more fuel tax bond requirements, which depend on the state’s regulations and their conditions. These bonds must be obtained during the process of getting licensed as a fuel seller, and submitted to your local Comptroller of Public Accounts, Department of Revenue, Department of Finance, or similar office in your state. A surety bond is a three-part agreement made between the principal (the business getting bonded), the obligee (the entity that’s protected by the bond, usually the public and the state) and the surety bond company, which issues and backs the bond. If a principal– in this case a fuel seller– is found to be in breach of state regulations, the surety steps in to compensate the obligees for any harm done to them. In return, as part of the indemnity agreement that is signed at the occasion of bonding a principal, the principal must fully reimburse the surety for its backing. Fuel tax bonds are financial guarantee bonds, which means that they are considered a higher risk by sureties. Sureties will usually check applicants very carefully before issuing a bond.
Questions about Fuel Tax Bonds
Who needs to obtain a fuel tax bond?
Generally, a fuel tax bond is mostly needed by sellers of fuel. In some instances this includes suppliers, importers, exporters and distributors of fuel.
Whether or not you need a fuel tax bond depends on the type of business you own, as well as your state’s regulations. The best way to find out is to inquire with the relevant institutions, such as your Department of Revenue or Finance.
Alternatively, find your bond on the table below, listing all fuel tax bonds that we can underwrite.
Are there different types of fuel tax bonds?
There can be different types of fuel tax bonds, depending on the state where you’re getting licensed. A fuel tax bond can sometimes be called a motor fuels tax bond, a mileage & fuel tax bond, a fuel distributor or fuel supplier bond, an IFTA (International Fuel Tax Agreement) bond and others.
All of the above are types of fuel tax bonds, and their designations vary from state to state. Some states have a number of different types of fuel tax bonds, depending on whether you are a supplier, seller, or something else.
How much does a fuel tax bond cost?
The cost of your fuel tax bond is a fraction of your fuel tax bond’s total amount. The total amount of your bond can vary, and is determined by state institutions, such as your Comptroller of Public Accounts or Department of Revenue.
For example, fuel tax bonds in Texas vary depending on whether you will be selling gasoline and diesel fuel, or dyed diesel fuel. For the former, bond amounts vary between $30,000 and $600,000, and for the latter between $10,000 and $600,000.
Depending on the amount which is determined for your bond, your surety will offer you a rate at which you can obtain the bond. This rate, or premium, is a percentage of the bond amount, and is based on the surety’s assessment of your financial stability. In assessing you, the surety will usually consider several factors– primarily your personal credit score, as well as your financial statements and your business history.
For bond amounts below $50,000, the owner’s personal credit score is the most important factor. If you have a high credit score you can expect your surety to offer you a rate of 1%-5% on your bond. Applicants with lower credit scores can expects rates between 5%-10%, and those with substantial liens or other past due items will probably see slightly higher rates. Keep in mind that larger bonds (greater than $50,000) will likely require business financial statements and other supporting documentation in order to underwrite.
If you want to know exactly how much you will need to pay for your fuel tax bond, apply for your bond by submitting your application. Once we process your application, we will contact you with your no-obligations quote, which is entirely free.
Can I get a fuel tax bond with bad credit?
If you don’t qualify for any of the above rates, due to a low or nonexistent credit score, it’s still possible for you to get bonded. Typically, bad credit applicants have a hard time getting bonded because of the increased risk they present, and the unwillingness of sureties to underwrite their bonds.
Fortunately, through our Bad Credit Surety Bonds program, most applicants can still get bonded, even for riskier financial guarantee bonds, such as fuel tax bonds. The cost for a fuel tax bond under this program is higher, yet applicants can still expect us to find the lowest possible rate we can.
At Lance Surety Bonds we are dedicated to serving all our customers equally and always try to find the best rates for them. Furthermore, all surety bonds which we offer are backed only by A-rated and T-listed companies, making them the best that you can get.
How to get your fuel tax bond?
To get your fuel tax bond, apply online by submitting your surety bond application form. Approvals and processing for fuel tax bonds is usually fast, though due to the nature of these bonds it may take slightly longer than for most license bonds.
You can always contact us at (877)-514-5146 if you have any questions or are in need of help. Our surety experts know all about bonding requirements for fuel tax bonds, and can help you out with additional information or guidance during the application process. Don’t hesitate to call!
Find Your Surety Bond
|Arizona||Motor Fuel Supplier Bond||MOTOR CARRIER TAX & SERVICES (MVD)||Apply Now|
|Arizona||IFTA||Motor Vehicle Division||Apply Now|
|Arkansas||Motor Fuel Tax Bond||Motor Fuel Tax Section||Apply Now|
|California||Diesel Fuel Supplier Bond||California Board of Equalization||Apply Now|
|Colorado||Mileage & Fuel Tax||Colorado Department of Revenue||Apply Now|
|Colorado||Fuel Distributors Bond||Colorado Department of Revenue||Apply Now|
|Connecticut||Surety Tax Bond||Connecticut DRS||Apply Now|
|Delaware||Special Fuel (Distillate/LP Gas)||State of Delaware Motor Fuel Tax Administration||Apply Now|
|Delaware||Motor Fuel Distributor Bond||State of Delaware Motor Fuel Tax Administration||Apply Now|
|Federal Government||Taxable Fuel Bond Certification||Department of the Treasury||Apply Now|
|Florida||Fuel or Pollutants Tax Bond||Florida Dept of Revenue||Apply Now|
|Georgia||Motor Fuel Distributor's||State of Georgia||Apply Now|
|Illinois||Financial Responsibility||IL Dept of Revenue||Apply Now|
|Indiana||Special Fuel License||Dept of Revenue Fuel Tax, Bonds & Licensing||Apply Now|
|Indiana||Gasoline Distributor's License Bond||Indiana Department of Revenue||Apply Now|
|Kentucky||Motor Fuel Tax Refund Permit Holder's||Department of Revenue Motor Fuels Tax Compliance||Apply Now|
|Kentucky||Motor Fuels License||KY Dept of Revenue Motor Fuels Tax Compliance||Apply Now|
|Louisiana||Motor Fuels Tax Surety Bond||Louisiana Department of Revenue||Apply Now|
|Maryland||Motor Fuel Dealer, User, Seller Bond||Comptroller of Maryland||Apply Now|
|Minnesota||International Fuel Tax Agreement and International||MN Dept of Public Safety||Apply Now|
|Mississippi||Contractor's Job Sales, Use, Income, Franchise, Wi||Department of Revenue||Apply Now|
|Mississippi||Contractor's Job Sales, Use, Income, Franchise, Wi||Mississippi||Apply Now|
|Missouri||Carter Energy||Carter Energy||Apply Now|
|Nebraska||Motor Fuels Tax Bond||Nebraska Dept of Revenue||Apply Now|
|Nevada||Fuel Tax (All Others, Sellers & Users) Bond||Nevada Department of Motor Vehicles||Apply Now|
|New Jersey||Supplier of Motor Fuels Tax||NJ Division of Taxation||Apply Now|
|New Jersey||Distributor of Motor Fuels Tax Bond||State of New Jersey||Apply Now|
|New York||Bond of Distributor of Automotive Fuel||NY State Dept of Taxation and Finance||Apply Now|
|North Carolina||Motor Fuels Tax Liability Bond||North Carolina Department of Revenue||Apply Now|
|Ohio||Dealer in Motor Vehicle Fuel||Department of Taxation||Apply Now|
|Oregon||Motor Vehicle Fuel Dealer Bond||OR Dept of Transportation||Apply Now|
|Oregon||Use Fuel Seller Bond||OR Dept of Transportation||Apply Now|
|Pennsylvania||Liquid Fuels and Fuels Tax||PA Dept of Revenue||Apply Now|
|South Carolina||State Motor Fuel User Fee Bond||Department of Revenue||Apply Now|
|Tennessee||Petroleum Products and Alternative Fuels||TN Dept of Revenue||Apply Now|
|Texas||Motor Fuels Tax (Diesel) Continuous||Comptroller of Public Accounts||Apply Now|
|Texas||Motor Fuels Tax (Gasoline) Continuous||Comptroller of Public Accounts||Apply Now|
|Texas||International Fuel Tax License Bond||Comptroller of Public Accounts||Apply Now|
|Virginia||(Lion Petroleum Inc) Fuel Supplier Bond||Lion Petroleum, Inc.||Apply Now|
|Washington||Fuel Tax Bond||Washington State||Apply Now|
|West Virginia||Motor Fuel Excise Tax Bond||WV State Tax Dept.||Apply Now|